Monero has plunged around 41% from its January 14 all-time high of $797, extending losses to nearly 20% over the past week.
The privacy-focused token fell 9.5% in a single day, wiping out much of its mid-month rally.
Analysts said Monero’s decline has been sharper than the broader altcoin pullback.
Zcash recorded more modest losses, dropping 3.1% on the day and 8.6% over the past week.
Market sentiment shifted after on-chain investigator ZachXBT linked Monero’s rally to illicit flows.
ZachXBT alleged that cybercriminals swapped roughly $285 million in stolen crypto into Monero, driving unsustainable demand.
Buying pressure faded once the laundering activity slowed, leaving prices exposed to heavy selling.
The downturn intensified after India’s Financial Intelligence Unit reportedly ordered exchanges to restrict privacy coin transactions.
Indian authorities cited heightened risks of money laundering and terrorism financing in the directive.
The measures reportedly target Monero, Zcash, and Dash.
India’s move follows similar restrictions introduced in the United Arab Emirates earlier this month.
Analysts warned that growing regulatory pressure is compounding Monero’s price weakness.
At the time of reporting, Monero price was $453.62.